Watford had the first chance after six minutes when Tommy Smith had a right-foot outswinging corner which was met by centre-back Darren Ward, who was 12 yards out in the centre of the penalty area and his header was saved by Preston keeper Andy Lonergan who dived to his left.
Will Hoskins then played in a left-wing cross which was fumbled by the Preston keeper.
Preston loanee Ross Wallace had a left-foot, right-wing inswinging corner after 16 minutes which was caught by Watford keeper Richard Lee.
After 19 minutes Smith had a volley which was met by John-Joe O'Toole and he hit a two-yard close-range header against the bar and the rebound fell to Ward, but the ball was blocked by Preston left-back Jay McEveley.
Ninety seconds before the break Preston made it 1-0 when Billy Jones found Wallace on the left wing and he hit a cross to the far post which was knocked back by Barry Nicholson.
Makeshift midfielder Jones arrived to place a 12-yard looping header high into the centre of the goal for his first ever goal for Preston.
This was against the run of play but Preston went in with a valuable lead at half-time.
Captain Paul McKenna hit a long-range shot wide and Stephen Elliott and Jon Parkin combined down the left wing and Youl Mawene headed just wide as the Lilywhites continued to push on after the break.
McEveley had a long run down the left wing and then fired over the bar and then it was McEveley who found Wallace and he cut inside from the right channel to hit a 25-yard left-foot shot against the post.
In the 68th minute Preston made the game safe, as McKenna played an assist to Wallace and he cut in to hit a 25-yard left-foot shot into the bottom right after beating Mathew Sadler.
Watford goalkeeper Lee made a mess of the shot, allowing the ball to squeeze through under his body to hand Wallace his first goal for Preston.